Greenwich firm adds Ned's head creator to Slinky

Rob Varnon

Updated 8:09 am, Wednesday, December 26, 2012

Right before Christmas, Greenwich-based MCC Capital's newest private equity fund bought toy designer and re-packager Fundex Games out of bankruptcy for $1.72 million.

Propel Equity Partners, started this year by MCC, said, it would incorporate Fundex assets into another recent acquisition, Poof-Slinky holding, the maker of the iconic slinky and foam sporting balls.

"Fundex Games has a wide array of board, card, outdoor and dice games, as well as toys that fit perfectly under our existing brands," Michael Cornell, partner in Propel Equity, said in an announcement. "This acquisition is a good next step in keeping with our strategy of acquiring leading innovative companies and bringing them under the Poof-Slinky brand umbrella."

Fundex, based in Indiana, was founded in the 1980s and has developed a variety of games for adults and children over the years, including "What's in Ned's Head" a matching game in which players try to match things like moldy cheese pulled out of Ned's head with picture cards.

The company also repackages, through licensing agreements with major toy makers, like Hasbro, popular games. It has a deal with Hasbro and Major League Baseball to sell a variety of Baseball-branded Scrabble boards.

According to one creditor's filing in the case, there was concern over the salary and payments going to the management of Fundex. According to a list of checks cut during the last 90 days before the bankruptcy filing, the president of Fundex was still collecting a salary of $4,000 a week and the firm was paying one of the founders a consulting fee. Listed among the assets of the company was a $17,000 outstanding loan for a BMW 535i.

A spokesman for Propel was not sure what the status of the BMW was following the acquisition.

In 2010, Fundex, according to bankruptcy records, had gross sales of $25.7 million, but as of August in 2012, it had only logged gross sales of $2.5 million.

The toy market in America is dominated by Chinese manufacturing companies, while U.S.-based companies serve as mostly marketing, distribution or development firms.

According to a U.S. Commerce Department report for 2012, more than 96 percent of the American toy consumption is filled by imports.

Propel's Slinky, served as the stalking horse bidder for Fundex, but had to outbid Zero Degrees to get the company.

Bill Daddi, a spokesman for Poof-Slinky, said the Fundex games would be added to the Slinky lines and should gain a lift from being associated with the more than 100-year-old brand.